There are things every adult should know. What’s the weather going to be like today? Where’s my polling place? How do I add fluids to my car? One question that’s equally important but not as often discussed is “What is my Credit score right now?”. More people need to know the answer to this question. Here’s why that’s important.
Your Credit Score is Your Canary in the Coal Mine for Fraud. Many people don’t really get what a credit score is. In very general terms, it’s a way to sum up your financial health at any given moment. If you’re late on your bills and taking out tons of credit, you credit score is going to reflect the fact that you seem to be financially vulnerable. If you have zero debt , a small handful of credit cards, and never miss a bill, your credit score will be high.
This is all well and good, but many forget that your credit score will also reflect the financial behaviors of people other than yourself. Who are we talking about? Fraudsters, of course. If someone gets your SSN and starts taking out credit cards in your name, your credit score will start to go down. For this reason, if you know your credit score at any given time, you’ll be able to notice when someone is monkeying with your credit. If you don’t know your credit score, chances are you’ll overlook the problem until its too late to reverse.
You can get your free credit score from multiple sources these days. It’s not inaccessible like it used to be. Why not check your credit score now?
A High Credit Score is Basically a Discount Coupon For Life. If you have a high credit score, this a message to all of the people who might one day give you a loan or credit. This message says “This person is good with money! If you lend them more money, they’ll probably pay it back!”. As such, creditors will be willing to give you money without tons of interest. Interest, after all, is a way for lenders to hedge their bets, to start collecting extra money not just for profit, but just in case you stop paying back the money you owe.
Not only this, a credit score will give you more opportunities, such as the ability to get a mortgage loan, or to be extra competitive for a new job or desirable rental property. People get knocked out of the running for these things all the time because of bad credit scores. They may not know that this is the reason, but it is. Knowledge is power. Learn your credit score.
Your Credit Score is Your Personal Finance Health Coach. Your credit score can change on a dime to reflect your changing financial situation. If you have more debt than you can comfortably handle, your credit score will go lower. If you open too many credit cards at once, your credit score will go lower. If you pay off the last of your student loan debt, your credit score will rise.
These are all ways for your credit score to act like a coach, pointing out mistakes and encouraging you to go better and faster. Not everybody likes this kind of financial pressure, but once you start acting according to the behaviors your credit score “recommends”, you’ll find yourself in a much better financial situation moving forward.
Get access to your credit score wherever you can find it. Sometimes you can get it easily through your bank. The Barclaycard Arrival Plus™ World Elite MasterCard® can also help you build better credit if you use it right. Keep track of your credit score and it will help keep your financial house in order.
The post 3 Reasons to Know What Your Credit Score Is appeared first on Modest Money.
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